complement Pogo's existing core operating area with a significant
under developed contiguous acreage position;

extend Pogo's indicated reserves life to approximately 10 years;

add over 400 development and exploration drilling locations to Pogo's
inventory.

Under the agreement, Pogo will acquire 275 bcfe of estimated proven reserves on approximately 404,700 net acres. Latigo's reserves are 49% natural gas and 51% oil. Beyond the proven reserves, Pogo believes that Latigo's properties contain high quality probable reserves and significant exploration potential. After allocating $60 million of the purchase price to Latigo's sizeable, as yet unexplored but prospective, leasehold acreage position and its extensive new 3-D seismic database, Pogo's acquisition cost per estimated proven reserves, would be $2.51 per thousand cubic feet equivalent ("mcfe").

BENEFITS OF THE LATIGO TRANSACTION

Critical Mass and Scope. The acquisition provides Pogo with additional critical mass in a core Pogo area in the Permian Basin and panhandle of Texas.

Latigo owns approximately 405,000 net acres with a working interest of
over 70%.

Latigo's properties offer a large inventory of drilling prospects,
including over 400 currently identified drilling locations. Due to a
large undeveloped acreage position, Pogo expects to pursue numerous
high-potential, 3-D seismic driven exploratory prospects.

Latigo operates over 90% of its total daily production, recently
averaging about 3,300 net barrels of crude oil and 20 million cubic
feet ("mmcf") of natural gas per day.

Latigo reserves are well balanced, with 49% natural gas and 51% oil.
This balanced asset mix helps Pogo continue to minimize its exposure to
the price cyclicality inherent in being tied exclusively to any single
energy source.

Latigo's reserves life of 18.8 years extends Pogo's overall reserves
life to about 10 years.

Significant Exploration and Development Opportunities. Latigo's development activities are concentrated in Texas, including the Collie Field in Reeves and Ward Counties, and the Courson Ranches areas located in Roberts and Ochiltree Counties. Key exploration plays have been identified in the 250,000 acres of the panhandle Ranches area.

Latigo's Permian Basin area hydrocarbons are adjacent to many of Pogo's
fine existing fields and are characterized by long reserves life and
low decline rates. Approximately 60% of Latigo's reserves and 50% of
its total production are located in this predominantly oil-bearing
region. Development opportunities targeting the Delaware and the
Grayburg/San Andres formations appear to be particularly promising.
Pogo believes that many significant upside opportunities exist in this
region, where over 200 infill and step-out drilling locations have been
identified.

Approximately 40% of Latigo's reserves and 50% of its production are
located in the panhandle of Texas. Pogo will be acquiring established
fields with significant development potential, as well as exploration
based upon newly acquired 3-D seismic in the panhandle Ranches area to
test multiple horizons, including the Brown Dolomite, Granite Wash, St.
Louis, and Hunton.

Latigo currently has seven rigs operating and Pogo's drilling agenda
for 2006 will include adding two more rigs and drilling more than 100
locations.

"We are pleased to announce the acquisition of Latigo, which fits into our strategy to grow Pogo's asset base in North America. Latigo will provide Pogo with a balanced portfolio of proven reserves, low risk development and extensive exploration opportunities," said Paul G. Van Wagenen, Chairman and Chief Executive Officer of Pogo. "The addition of Latigo's properties, in one of Pogo's most active geographic areas, will result in significant, cost- effective growth," Mr. Van Wagenen concluded.

Pogo has entered into costless collars covering about 75% of Latigo's current production volumes extending throughout the remainder of 2006 and full year 2007 and 2008. Pogo has oil costless collars covering 2,500 barrels of oil per day with a floor of $60.00 per barrel and ceiling averaging $84.25 per barrel for the balance of 2006, $60.00 per barrel by $83.15 per barrel for all of 2007, and $60.00 per barrel by $80.13 per barrel for all of 2008. Pogo has gas costless collars covering 15 mmcf/d of gas with floors of $7.00 per mcf and ceilings ranging from $10.60 to $10.70 per mcf for the remainder of 2006; $8.00 per mcf by $13.40 to $13.65 per mcf for all of 2007; and $8.00 per mcf by $12.05 to $12.25 per mcf for all of 2008.

Pogo intends to finance the Latigo acquisition utilizing cash on hand, capacity under its existing revolving credit facility and opportunistic capital market transactions. Regarding 2006 results, Pogo expects to update the full year 2006 guidance on April 25, 2006, in conjunction with the release of the company's first quarter 2006 results. The transaction is subject to customary regulatory approvals and is expected to close during May of 2006.

Pogo Producing Company explores for, develops and produces oil and natural gas. Headquartered in Houston, Pogo owns approximately 3,885,000 gross leasehold acres in major oil and gas provinces in North America, 1,044,000 acres in New Zealand and 1,480,000 acres in Vietnam. Pogo common stock is listed on the New York Stock Exchange under the symbol "PPP."

Latigo is a privately owned exploration and production company that was formed by Latigo Management, Warburg Pincus LLC and JPMorgan Partners in 2002.